Housing prices worsen

December 30, 2008

The S&P/Case Shiller Index, a bellwether for the new housing market, reported continued declines in the price of single-family homes across the country through October 2008. The most recent report, released Dec. 30, showed record rates of annual declines in 14 of 20 metro areas tracked.

The 10-city and 20-city composite price indices also set new records, with annual declines of 19.1 percent and 18.0 percent, respectively.

“The bear market continues with home prices back to their March 2004 levels,” said David Blitzer, chairman of the Index Committee at Standard & Poor’s. “In October, we also saw three new markets enter the ‘double-digit’ club. Atlanta, Seattle and Portland are reporting annual rates of decline of 10.5 percent, 10.2 percent and 10.1 percent, respectively. While not yet experiencing as severe a contraction as in the Sunbelt, it seems the Pacific Northwest and Mid-Atlantic South are not immune to the overall demise in the housing market.”

Blitzer also pointed out that, as of October 2008, the 10-City Composite is down 25.0 percent from its mid-2006 peak, and the 20-City Composite is down 23.4 percent.

Phoenix remains the weakest market in the country, in terms of new housing prices, with an annual decline of 32.7 percent, according to the report. Las Vegas and San Francisco follow next, at 31.7 percent and 31.0 percent.

Dallas and Charlotte performed the best in October, in terms of year-over-year returns; their declines remained in the low single digits of -3.0 percent and -4.4 percent, respectively. Cleveland and Denver were the only markets that showed any improvement in year-over-year returns compared to last month’s figures.